The European Union’s competition watchdog said Belgium and France have until the end of 2017 to take the necessary steps to remove the tax exemption.
The European Commission is requiring Belgium and France to abolish corporate tax exemptions granted to their ports, thus aligning their tax regime with European Union state aid rules, the EU competition watchdog said in a statement.
Belgium and France have until the end of 2017 to take the necessary steps to remove the tax exemption, the commission said.
The European Commission said it believes the corporate tax exemptions granted to Belgian and French ports provide them with a selective advantage, in breach of EU state aid rules, and that the exemptions do not pursue a clear objective of public interest.
“The tax savings generated can be used by the port operators to fund any type of activity or to subsidize the prices charged by the ports to customers, to the detriment of competitors and fair competition,” the commission said.
Various sea and inland waterway ports in Belgium – including the ports of Antwerp, Bruges, Brussels, Charleroi, Ghent, Liège, Namur and Ostend, as well as along the canals in Hainaut Province and Flanders – are currently exempt under Belgian law from the general corporate income tax regime.
These ports are subject to a different tax regime that has a different taxable base and tax rates, resulting in an overall lower level of taxation for Belgian ports compared to other companies throughout the country.
Meanwhile, in France, most ports – notably the 11 “grands ports maritimes,” the Port autonome de Paris, and ports operated by chambers of industry and commerce – are fully exempt from corporate income tax under French law. The 11 grands ports maritime include the ports of Bordeaux, Dunkerque, La Rochelle, Le Havre, Marseille, Nantes-Saint-Nazaire and Rouen, as well as Guadeloupe, Guyane, Martinique and Réunion.
The European Commission will not be able to ask Belgium and France to recover the aid already granted, since the corporate tax exemption for ports already existed before the accession of France and Belgium to the EU.
The European Commission argued that removing “unjustified” tax advantages does not mean that ports will no longer be able to receive state support.
“In May 2017, the commission simplified rules for public investment in ports,” the EC said. “As a result of the commission extending the General Block Exemption Regulation to non-problematic investment in ports, member states can now invest up to 150 million euros (U.S. $175.5 million) in sea ports and up to 50 million euros in inland ports with full legal certainty and without prior verification by the commission.”
European Commission forces Belgium, France to abolish tax exemptions for ports
